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Standing Committee B
Thursday 17 January 2002
[Mr. Bill O'Brien in the Chair]
Mr. Nick Hawkins (Surrey Heath): I beg to move amendment No. 426, in page 186, line 11, after 'he', insert 'knowingly'.
The Chairman: With this it will be convenient to take amendment No. 428, in clause 323, page 187, line 2, after 'he', insert 'knowingly'.
Mr. Hawkins: Good morning, Mr. O'Brien, and members of the Committee.
The amendment is small, but short amendments often have the greatest significance. We are considering money laundering, a most important part of the Bill. A significant issue will be whether people should be regarded as having committed offences only if they do so with knowledge. The amendments are supported strongly by the Law Society of Scotland and the Law Society of England and Wales. It is fair to say, however, that had the Law Society of Scotland, which is quick off the mark with its proposals, not contacted me and my hon. Friend the Member for Beaconsfield (Mr. Grieve), we would undoubtedly have tabled an amendment along the same lines, because we feel strongly about such issues.
At present, the Committee does not have the benefit of the attendance of any Liberal Democrats, but I imagine that when they show up—at whatever time that will be—they may agree with us. The amendments are linked with other issues that we shall discuss under part 7. I am sure that the Ministers accept that clauses 321 to 327 are closely interlinked, so it will be a little difficult not to have arguments that are similar, albeit separate, about several provisions.
It is clear from clause 329(3) that the alleged offender must know or suspect that the property concerned constitutes or represents a benefit from criminal conduct before he can be convicted under clause 321(1). However, no reference is made to the mental element that must be attributed to the actions of the offender before the act is constituted as an offence. Although the alleged offender may know that the property is criminal property, he or she should—in the view of my hon. Friend and myself—have knowingly concealed, disguised, converted, transferred or removed the property before being liable to conviction under the clause.
Ian Lucas (Wrexham): That is precisely the point about which I am not clear. I do not see the purpose of the amendment, bearing in mind the contents of clause 329(3). Despite the hon. Gentleman's elucidation of the difference, I am unclear as to what it is.
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Mr. Hawkins: I hoped that I had explained what lawyers would regard as mens rea. It is a vital part of any provision that sets a new offence in law. That is what clause 321 does. Before the hon. Gentleman intervened, I expressed my acceptance that there are clear links between clauses 329(3) and 321. Indeed, I specifically spoke about that matter, as he will concede, because I know that he was listening carefully. Nevertheless, we strongly believe that, under any provision that sets out an offence, the mental element should be included in the Bill.
I will listen with great interest to the Minister's response. I expect that he will say that the amendment is unnecessary, because of the existence of clause 329(3).
Mr. Paul Stinchcombe (Wellingborough): I have a lot of sympathy for the amendment, because I support a mens rea element. It worries me that the mens rea element under clause 329(3) seems to apply to the definition of the property rather than to the conduct itself.
Mr. Hawkins: Not for the first time in this Committee, the hon. Gentleman helps us. I must say—without being churlish—that on Tuesday afternoon this week, he made several impassioned contributions in agreement with the arguments of my hon. Friend the Member for Beaconsfield and myself in support of a different amendment, but then voted against us. No doubt he has a career to think about, and is in thrall to the Government Whip, the hon. Member for Stirling (Mrs. McGuire), but he has once again expressed sympathy for our amendment. He has dealt with the point that I was about to come to in my response to the hon. Member for Wrexham (Ian Lucas). Clause 329(3) attaches the mental element to a different aspect. I interpret that provision in exactly the same way as the hon. Member for Wellingborough (Mr. Stinchcombe) and no doubt he will explain to his party colleague and fellow lawyer, the hon. Member for Wrexham, why he agrees with us, not him. We tabled the amendment in all seriousness, and we shall listen with interest to what the Minister has to say in due course.
Mr. Dominic Grieve (Beaconsfield): It may be useful—picking up on the comments of the hon. Member for Wellingborough—to make a few further remarks before we hear from the Minister. It has been suggested that an amendment to introduce mens rea under clause 321 is unnecessary because of the definitions under clause 329(3). As the hon. Member for Wellingborough correctly pointed out, clause 329(3) is about the definition of criminal property. One of the oddest aspects of that provision is the incompatibility between the definition of property under clause 329(3) and the definition under clause 320 with reference to Revenue functions.
Clause 329(3) introduces the extraordinary concept that criminal property can be defined by reference to the state of mind of the person who is handling it. By its very nature, that is an extraordinarily convoluted way of drafting legislation to define when a person may be culpable. Clause 321, as currently worded, is as about as stark as it possibly can be. It states that:
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''A person commits an offence if he . . . conceals criminal property''.
In ordinary English, that means that someone could conceal criminal property without any mens rea and irrespective of whether he has guilty knowledge.
Mr. Tom Harris (Glasgow, Cathcart): I am not a lawyer, and I bow to the hon. Gentleman's experience in those matters. If I were a lawyer, I would probably support the amendment, because it seems to give members of that profession a cast-iron defence if they are ever charged with an offence under the clause. They could simply say in court, ''I didnae know.'' I am sure that it is not the hon. Gentleman's intention, but he is unwittingly giving a defence to those who help drug dealers to conceal money.
Mr. Grieve: The hon. Gentleman is wrong about that. Plenty of criminal offences require the perpetrator to have guilty knowledge. Prosecutors do not have too much difficulty in satisfying juries or courts that a person had such knowledge, and a jury can often conclude that a person must have known that property was criminal property. The amendment does not provide a cast-iron defence.
We are examining whether there should be an objective or subjective test, and we are considering the wording of part 7. The wording at first creates a stark impression, which is qualified eight or nine clauses later. If we consider the matter in a common-sense way, we find that that is nonsense, as the definition relates to the property, and not to the state of knowledge of the person. The clause contains bad drafting, and that should concern the Committee, especially as the point was made when we discussed clause 320 that there are unsatisfactory and undesirable inconsistencies in the Bill.
Mr. Stinchcombe: My hon. Friend the Member for Wrexham made the good point to me that if someone reasonably suspects that property is criminal, how can they justify any concealment or disguise of that property?
Mr. Grieve: The hon. Gentleman has moved on to an important topic, and it may be sensible to consider it now. Let us consider by way of example the sort of circumstances with which lawyers, advisers or those caught under the clause will deal. No one would wish that someone who was told, ''Here is £1 million, which is the profits of drug trafficking—would you please invest it for me?'' should get away with handling the money. Such a person would clearly have knowledge. However, clause 329(3) uses the word ''suspects''. Today, and possibly also early next week, I shall want to explore carefully with the Minister examples of situations in which that word would be likely to bite.
Let me give another example. A person handles financial arrangements for someone who he knows has a criminal conviction from 25 years earlier. He has no knowledge that the person has been involved in criminality since then. The person asks him to invest money that appears to have a legitimate origin, yet he must accept that, at the back of his mind, he is always aware of that individual's previous convictions. Does
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he come under the category of someone who should be suspicious and therefore inform the authorities every time a transaction takes place?
As we shall discuss later, there is no de minimis provision in the part concerning money laundering: it applies from 1p to infinity. The Law Society and others cogently gave me the impression that they felt that the proposal would in practice make life difficult for those who legitimately handle funds for others, such as in purchasing a house, because they will be in a perpetual state of anxiety that they might be committing a criminal offence even though they have no reason to know that they are handling criminal property. Where is the dividing line supposed to fall between a state of knowledge and a state of mere suspicion? Some important issues are involved, and I should be grateful for the views of other Committee members on that.
To return to the amendment, my first impression of clause 321 is that surely the absolute acid test in such circumstances is whether the person has knowledge.
Mr. David Wilshire (Spelthorne): I have always wanted to get free advice from a lawyer, and I will find out whether I can do so now. My hon. Friend referred to a dividing line. Will he explain whether a dividing line is involved when the property is ordinary property and it becomes criminal property? If someone removes something that is criminal, that is covered, but in the case of something that is not criminal, is the moment of its becoming criminal when the conviction is obtained, and up until that time is it suspected? If so, a person can move something that is not criminal and be caught retrospectively.